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Sept Earnings Soar: Double-Digit Growth Reported
26 Oct
Summary
- Aggregate revenue grew 22.1%, highest in nine quarters.
- Net profit expansion accelerated to 27.5% year-on-year.
- Operating margin contracted 150 basis points due to banking sector.
The September quarter's corporate earnings show a significant upward trend, with aggregate revenue and net profit experiencing double-digit growth. This performance was largely propelled by strong results from companies in sectors such as capital goods, metals, consumer durables, chemicals, and auto ancillaries. A common sample of 357 companies reported a 22.1% year-on-year revenue growth, marking a nine-quarter peak, and a faster net profit expansion of 27.5% compared to the previous quarter.
Despite the overall positive trend, certain sectors like banking, IT, and pharmaceuticals exhibited a deceleration in their year-on-year growth rates. The banking sector's weak net interest margins contributed to a 150 basis point contraction in the aggregate operating margin to 20.8%. Excluding financial entities, operating margins improved, and revenue and profit growth saw substantial increases, indicating the sector's significant influence on aggregate figures.
The IT sector also saw its contribution to revenue and net profit decline. This is attributed to extended project cycles as clients navigate the impact of new technologies like artificial intelligence. Analysts had anticipated double-digit growth across most sectors, with automobiles, consumer discretionary, and industrials expected to lead the surge.
